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Karnataka Tobacco Price Crash Triggers Ultimatum to Buyers

Authorities issued a 24-hour deadline for tobacco buyers to restore prices.

Overview

  • Prices have fallen by ₹50–₹70 per kg to about ₹260–₹270, which stakeholders link to reduced procurement after the GST on tobacco products rose to 40% on February 1 and an auction boycott lasting about 15 days.
  • Mysuru MP Yaduveer Krishnadatta Chamaraja Wadiyar wrote to Commerce Minister Piyush Goyal seeking immediate intervention for fair procurement of the remaining 40–45 million kg, as MPs also pressed for a review of the GST increase.
  • District authorities instructed procurement firms to resume purchases at earlier rates and to submit their pricing decisions within 24 hours, warning of strict legal action for delays or anti-farmer stances.
  • State minister K. Venkatesh warned that company godowns could be seized if purchases do not resume at rates prevailing before Sankranti.
  • ITC requested a meeting at its Guntur headquarters and sought time to consult senior management, while farmers demanded a ₹250 per kg minimum and parity with Andhra Pradesh prices.